The Duality of Programmatic Ad Buying

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The Duality of Programmatic Ad Buying
Programmatic ad buying draws comparisons to the stock market

As with most digital process in the post-Web 2.0 world, programmatic ad buying was a big deal before most even heard of it. Marketers have been quite taken with the automation and quality-of-life improvements that come with programmatic buying, specifically real-time bidding (RTB) and programmatic direct. However, good things come with a price and many marketers have fallen victim to online traffic fraud driven by bots or, perhaps even worse, had their ads placed on woefully inappropriate pages (an airline ticket ad placed alongside coverage of the Malaysia flight tragedy, for example).

Still, marketers and publishers alike have taken up programmatic buying models en masse. Eighty-five percent of advertisers use programmatic ad buying strategies and 91% expect to do so within the next couple of years, according to the Interactive Advertising Bureau. With adoption like that it's hard to avoid the practice. But with unsolved issues like fraud and poor ad placement, should marketers opt to avoid it?

Here, several marketing industry insiders expound on some of the pros and cons of RTB and programmatic direct, while comparing the two models and offering tips to marketers on the fence or steeped in the programmatic buying mix.

Pros

  • More efficient than manual buying

“The rise of digital channels and platforms has made the digital advertising world more fragmented. RTB allows for advertisers to make their media dollars more efficient. Buyers want a keener understand of data as a result of their ad buys.” – Maren Lau, CMO, IMS

  • Automated workflow

“You've automated a lot of the workflow of buying and selling digital advertising if you buy programmatic. This benefits both the marketer and the publisher.” – Mike Kisseberth, chief revenue officer, Tech Media Network

  • Makes it easier to break into international markets

“RTB allows international marketers to cherry pick pages. With the right tools brands can rate safe and play safe with RTB. Where else can you go to get the whole world of inventory available to you?” – John Snyder, CEO, Grapeshot

  • The growth is in programmatic buying

“Marketers are channeling demand and buying behavior here. Why not participate? Since more and more demand is going through programmatic channels you don't want to bypass these channels.” – Tech Media Network's Kisseberth

  • Customizable buying parameters

“With programmatic direct one can place a minimum and maximum threshold for what they're willing to pay.” – IMS' Lau

  • More control and more data

“Programmatic allows users firsthand access to targeting and reporting tools and information they wouldn't otherwise have, which can help them take ownership of the success of their campaigns and maximize ROI.”  – Ted Dhanik, president and CEO, Engage:BDR

Cons

  • Scarce premium inventory

“Premium inventory is, at the present moment, typically harder to come by in the programmatic space, so users should look carefully for a platform that offers both premium and remnant inventory.” – Dhanik

  • Highly dependent on the programmatic network

“One of the challenges here in Latin America is that there aren't a lot of publishers plugged into the programmatic network. For programmatic to work you need a lot of publishers contributing inventory.” – Lau

  • You get what you pay for

“Because of the dynamic of the marketplace advertisers minimize prices beyond the lowest point. It hasn't let publishers make out on every activity. People claim they're getting all of this inventory, but the quality is often questionable. You get what you pay for. It's like the horsemeat scandal in the U.K.” – Doug Conely, chief strategy officer, Exponential Interactive

  • It's still early for direct

“It's hard to figure out what's really happening. The blogs say it works all the time, but when you ask people for API documentation you get nothing back. I would love for someone to have a central depository to prove this is more than just a concept.” – Conely

  • Easy to make a bad purchase

“RTB is dangerous if you don't curate the inventory.  CMOs have to realize it's not just the site, it's the page and they have the ability to look page by page.” – Grapshot's Snyder

  • Has the potential to be one-sided
“Everyone should be asking themselves what's the right thing for the advertisers and how can we pay publishers a fair price. You need a healthy publishing environment.” – Conely
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Founded in September 2009, Stirista is an integrated marketing agency that specializes in ...